Monday, March 18, 2013

Elizabeth Warren: Why Isn’t Minimum Wage $22 an Hour?

During this Q & A, Elizabeth Warren seems to imply that she would be in favor of a $22.00 minimum wage. She addresses her question to University of Massachusetts assistant professor Arin Dube, who appears to support her view.

According to "research" Dube has conducted, both short and long term effects of increased wage on unemployment are negligible. These dubious Dube findings are based on improper methodology and fly in the face of logic.

Beyond that there are two problems with Warren's argument based on productivity. First, productivity gains are very difficult to measure. In his book, The Age of Turbulence, Alan Greenspan pointed out that the Bureau of Labor Statistics and Commerce Department, both, initially missed the productivity gains of the personal computer! (p 172)

The data we were getting from the Commerce and Labor departments showed that productivity (measured as output per hour worked) was virtually flat in spite of the long-running trend toward computerization.
So any productivity gains data Warren is using should be evaluated with a great degree of skepticism. They can be off in any direction. Second, Warren is using a macro number that averages productivity over the entire jobs population. This should be viewed with even greater skepticism than her productivity claims. There is simply no basis for the view that productivity gains increase at the same rate over the entire jobs population. A hamburger flipper and a floor sweeper may see no productivity gains, while someone designing new cars may see a huge gain in productivity because of new software that makes design much easier.

Warren ignores all this in her wacky Q & A, with dubious Dube, below.

12 comments:

  1. Is that Yoda? Changed his name and went into academia. Teaching he is. Wrong he is.

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  2. She also completely ignores the FED as the primary cause of our labor and capital problems.

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    1. She doesnt see the fed as a problem. To her it's just greedy capitalist hoarding all the money from us slave laborers, and she needs to help us!

      She asked 'why has production increased but wages have not?' that would only be a legitimate question if the money supply hadnt increased so much. As products become less scarse they should become less expensive, only if he money hasnt also become less scarse...

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  3. The level of ignorance is only exceeded by her arrogance. As if she would know what the proper price of labor is for millions of people in thousands of different disciplines in areas with completely different costs of living.

    We're being led by power-mad sociopaths. They're destroying this country from within. It's the decline of Rome 2.0.

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  4. The major problem she ignores is why prices have not fallen but risen. Generally speaking, if productivity rises, prices should come down as products become less scarse, therefor wages would actually have risen in terms of buying power...

    She completely misses this basic fact of economics.

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    Replies
    1. The democrats don't want people to know that their wages have been flat because of healthcare costs. Employers are paying more for healthcare and less in wages. It isn't that complicated.

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  5. Elizabeth Warren: Why Isn’t Minimum Wage $22 an Hour?

    Answer: Because you are simply not worth that much...

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  6. 50 years ago, the minimum wage was 4 silver quarters per hour. Today, those same quarters are worth $20.72. We don't have a minimum wage problem, we have a money problem.

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  7. My nephew can't get a full-time job because if he works 40-hours, he must get health insurance from his employer. If the cost of health insurance is added to a higher minimum wage, the job outlook for high school graduates is quite bleak. He is planning to work two 20-hour jobs, and to forego health insurance. This is Senator Warren's utopia.

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  8. Look at how she tries to convince herself that what she's saying is true as she talks.

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